The Future Lawyer Weekly Update – w/c 30th April 2018

Your round-up of the stories that you should discuss at interview this week:

Business

Reported by Andrew MacDonald

Panasonic to pay $280m corruption fine

Japanese electronics giant, Panasonic, has agreed to pay more than $280m in response to charges brought under the US Foreign Corrupt Practices Act.

Panasonic Avionics Corp., a wholly owned subsidiary of Panasonic Corp. of Japan, admitted to violating an accounting provision of the main U.S. anti-bribery legislation. The US said that the company’s in-flight entertainment division hired consultants for “improper” purposes and concealed payments to sales agents in China and elsewhere in its Asia market.

Under the Foreign Corrupt Practices Act, bribing foreign officials to obtain or keep a business advantage, as well as hiding those payments in a company’s books, is strictly prohibited. The law applies to all US corporations throughout the world.

The payments in question were made by Panasonic Avionics Corp, between 2007 and 2016. In one case, the company hired a foreign official as a consultant, at the same time that the official was negotiating a contract between Panasonic and a government-owned airline in the Middle East.

The official was paid $875,000 over a six-year period, despite doing “little work”, according to US documents.

Panasonic Avionics entered into a deferred-prosecution agreement (DPA) with the US Justice Department over the charge that it falsified the financial records of its parent company. The company agreed to continue to cooperate with the Justice Department’s investigation. It has agreed that it will revise its compliance program and retain an independent compliance monitor for at least two years.

It has recently been revealed that Sainsbury’s has agreed to purchase Walmart-owned ASDA for over £7bn, a move which will put Sainsbury’s on track to become Britain’s biggest supermarket. The combination would in fact create what has been described as a ‘giant’, representing nearly £1 in every £3 spent on groceries.

The merger of the UK’s second largest grocer (Sainsbury’s), with the third largest (ASDA), is arguably in response to the shift in the retail market, to be better placed against discounters such as Aldi and Lidl, along with Amazon’s recent steps into grocery deliveries.

A pledge has been made by Sainsbury’s Chief Executive Mike Coupe not to close stores or lay-off any store staff, but Sarah Butler, from The Guardian, has stated that this merger is ‘expected to trigger a major inquiry which analysts predict will result in at least 75 stores having to be disposed of.’

Others have also expressed concerns. Labour’s shadow business secretary Rebecca Long-Bailey has told the BBC that she is apprehensive about the ‘immense purchasing power’ and the effect this will have on suppliers.

Despite these concerns, the stock market has responded positively to the news – shares in Sainsbury’s have since closed 15% higher.

The supermarkets have also stated that they expect to be able to lower prices ‘by around 10% on many of the products customers buy regularly.’

Still, the impact of the Competition Market Authority should not be overlooked and it remains the single biggest threat to the transaction going ahead in its announced form.

Back in 2017 the government announced plans for a ‘digital revolution’ in relation to the tax system. The theory behind it was to make it easier for individuals and businesses to stay ahead of their taxes to avoid the need for annual tax returns.

Previous plans suggested rolling out an online system for businesses to file and fulfil their VAT obligations by April 2019. Judgement day for the paper self-assessment was also due in 2020.

The proposal lists “four foundations” upon which the idea is based. HMRC suggested increased efficiency, transparency, easier to use platforms and digital interaction for businesses with their customers / clients. Whilst some of the plans have been implemented, the more complex elements are now on the back burner.

This week however, HM Revenue and Customs (HMRC) has announced that the entire plan has been halted. The reason given was the enormous amount of work the department is putting in to Brexit preparations. HMRC wrote in an email, sent out to accountants, that it may have been “overly ambitious” regarding time scales for the project. The decision to pause the process follows warnings from the Chartered Institute of Taxation to expect ‘mass errors’ during the initial stages.

The Birmingham’s outsourced prison, run by G4s, has recently had five inmates die within seven weeks. It has been alleged that the latest inmate, Marcus McGuire, killed himself. He was found dead in his cell on Tuesday, 9am.

The other four victims were found dead in March. John Delahaye was found dead in his cell on March 5th, with the death being a suspected suicide. This was just days before he was due to stand for trial. Ricardo Holgate was found dead on March 26th from a suspected overdose. Andrew Carr was found dead on either the 29th or 30th March after allegedly taking smuggled-in drugs. Neil Black then died on the 31st March from natural causes, apparently.

Rob Kellett, the prison’s director, has reassured the public that investigations into the multiple deaths were under way and that they were unrelated. However, he declined to comment any further.

Following these deaths, the Prison Officers Association warned of a “crisis that has been created in the prison service.”

Kellet has tried to reassure society by stating, “every death in custody is a tragedy and is always thoroughly investigated by the prisons and probation ombudsman. while the recent deaths at HMP Birmingham are believed to be unrelated events, investigations are ongoing and it would not be appropriate to comment further.”

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